# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 14, 2017 Decided February 16 , 2018

No. 15

- 1115

S OUTH C OAST A IR Q UALITY M ANAGEMENT D ISTRICT

, P ETITIONER

v.

E NVIRONMENTAL P ROTECTION A GENCY

, ET AL

., R ESPONDENTS

N ATIONAL E NVIRONMENTAL D EVELOPMENT A SSOCIATION ' S C LEAN A IR P ROJECT

, ET AL

., I NTERVENORS

Consolidated with 15

- 1123

On Petitions for Review of a Final Action

of the Environmental Protection Agency

Megan E. Lorenz Angarita argued the cause for petitioner South Coast Air Quality Management District. With her on the
briefs were Kurt R. Wiese and Barbara Baird

.2

Seth L. Johnson argued the cause for Environmental
Petitioners. With him on the briefs was David S. Baron

.

Kelvin J. Dowd and Andrew B. Kolesar III were on the
brief for amicus curiae Ventura County Air Pollution Control District in support of petitioner South Coast Air Quality Management District.

Heather E. Gange , Trial Attorney, U.S. Department of Justice, argued the cause for respondents. With her on the brief

was John C. Cruden , Assistant Attorney General at the time the
brief was filed.

Seth L. Johnson argued the cause for Environmental

Movant

- Intervenors. With him on the brief was David S.

Baron

.

Megan E. Lorenz Angarita

, Kurt R. Wiese

, and Barbara
Baird were on the brief for amicus curiae South Coast Air Quality Management District in support of respondent’s opposition to Sierra Club’s argument regardin g reasonably available control technology in Case N o. 15

- 1123.

Leslie Sue Ritts was on the brief for intervenor for respondent National Environmental Development Association's Clean Air Project in support of U.S. Environmental Protection Agency.

Befo re: G ARLAND

, Chief Judge

, R OGERS

, Circuit Judge

, and S ENTELLE

, Senior Circuit Judge

.

Opinion for the Court filed by Senior Circuit Judge
S ENTELLE

.3

S ENTELLE

, Senior Circuit Judge : In this consolidated proceeding, we consider petitions for review of an Environmental Protection Agency (“EPA”) final rule entitled “Implementation of the 2008 National Ambient Ai r Quality
Standards for Ozone: State Implementation Plan Review Requirements,” 80 Fed. Reg. 12,264 (Mar. 6, 2015)

. In C ase No. 15

- 1115, petitioner S outh Coast Air Quality Management District (“South Coast”) contends that the EPA incorrectly concluded that precedent of this Court requires emissions
reductions that demonstrate reasonable fur ther progress all
come from within the nonattainment area. In C ase No. 15

- 1123, petitioners Sierra Club, Conservation Law Foundation, Downwinders at Risk, and Physicians for Social Responsibility (Los Angeles) (“Environmental Petitioners”) contend that in enacting the Final Rule, the EPA acted arbitrarily and caprici ously in its revocation of 1997 N ational Ambient Air Quality Standard s and relaxation of previously applicable requirements under the Clean Air Act.

For the reasons stated below, we deny South Coast’s petition for review, and grant in part and deny in part that of
the Environmental Petitioners

.

I. BACKGROUND

A. The Clean Air Act Framework

The Clean Air Act (“CAA” or “Act”) direct s the EPA to

set National Ambient Air Quality Standards (“ NAAQS ”) for air pollutants “allowing an adequate margin of safety . . . requisite to protect t he public health.” 42 U.S.C. § 7409 (b)(1)

. The CA A also requires the EPA to establish air quality contro l regions and designate them as “attainment” for “any area

. . . that meets” the NAAQS, “nonattainment” for “any area that
do es not meet” the NAAQS, and “unclassifiable” for “any area4

that cannot be classified on the basis of available information.” § 7407 (d)(1)(A)

.

The EPA must classify e ach area “ desig nated

nonat tainment for ozone ” as “marginal,” “moderate,” “serious,” “severe,” or “extreme” based on the degree to which
the ozone level in the area exceeds the NAAQS. § 7511. “An area that exceeds the NAAQS by a greater margin is given
more time to meet the standard but is subjected to progressively more stringent emissions controls for ozone precursors, namely

, volatile organic compounds (VOCs) and oxides of nitrogen (NO
x ).” Natural Res. Def

. Council v. EPA ( NRDC
2009 ) , 571 F.3d 1245, 12 50 (D.C. Cir. 2009)

.

The Act places on the states “ the primary responsibility for assuring air quality ” by submitting state implementation plans (“SIPs”) that specify how they will achieve and maintain compliance with the NAAQS

. 42 U.S.C. § 7407(a). States must formally adopt SIPs through state notice and comment rulemaking and then submit the SIPs to the EPA for approval. § 7410(a). For those areas designated as “nonattainment,” SIPs
must show how the areas will achieve and maintain the relevant NAAQS. Id

.

A nonattainment area may be redesignated to attainment if
the EPA (1) has determined that the area has attained the applicable NAAQS; (2) has fully appr oved the applicable SIP under § 7410 (k); (3) has determined that the attainment is due to permanent and enforceable emission s reductions; (4) has fully approved a § 7505a “maintenance plan,” which demonstrates that the area will maintain the NAAQS for at least 10 years after the redesignation

, see § 7505a(a) ; and (5) has determined that the state containing the area seeking redesignation has met all applicable SIP requirements.5

§ 7407(d)(3)(E). Areas redesignated as attainment are referred
to as “maintenance areas.”

B. SIPs for Nonattainment Areas

As is relevant to this case, t he Clean Air Act requires SIPs for nonattainment areas to include the following provisions:

1. Reasonable Further Progress

SIP s for nonattainment area s “ shall require reasonable
further progress

. ” § 7502(c)(2). “ Reasonable further progress ”
is defined as “such annual incremental reductions in emissions of the relevant air pollutants as are required by this part or may reasonably be required by [ the EPA] for the purpose of ensuring attainment of the applicable [NAAQS] by the applicable date.” § 7501(1). The Clean Air Act requires an area in a moderate or greater degree of nonattainment to reduce emissions of VOCs by fifteen percent in the first six years after November 15, 1990

. § 7511a(b)(1)(A). For areas in a serious or greater degree of nonattainment, subsequent reductions in VOC emissions must average three percent per year over each
consecutive three

- year period until the area reaches attainment. § 7511 a (c)(2)(B).

2. Reasonably Available Control

Technol ogy

SIPs for ozone nonattainment areas must also “provide for the implementation of all reasonably available control

measures as expeditiously as practicable (including such reductions in emissions from existing sources in the area as may be obtained through the adoption, at a minimum, o f reasonably available control technology ).” § 7502(c)(1). For nonattainment areas classified as moderate and above, SIPs6

must “require the implementation of reasonably available control technology” with respect to all major sources of VOCs
in the area a nd any sources that emit VOCs in the area that are covered by a c ontrol technique guideline. § 7511a(b)(2). The reasonably available control technology requirement also applies to major sources of NO
x . § 7511a(f).

3. New Source Review

SIPs governing nonattainment areas must require permits
for the construction of new or modified sources of air pollution. §§ 7502(c)(5), 7503, 7410(a)(2)(C). The goal of N ew S ource R eview is to require permits to ensure that new or modified
sources will not exacerbate the pollution proble m in the nonattainment area. § 75 03(a)(1)(A), (a)(2), (c). New Source permits for major sources of VOC s require the proposed source (1) to comply with the lowest achievable emission s rate and (2) to obtain pollution offsets represent ing equal or greater reductions of a pollutant at issue in the area. Id.

4. Conformity

The Act mandates that n onattainment and maintenance

areas are subject to “ conformity requirements, ” so that “ [ n ] o department, age ncy, or instrumentality of the Federal
G overnment shall engage in, support in any way or provide financial assistance for, license or permit, or approve, any activity which does not conform to an implementation plan.” § 7506(c)(1) , (5)

. Federally funded projects must “conform” to SIPs, mean ing that the projects will not “cause or contribute to any new violation,” “increase the frequency or severity of any existing violation,” or “delay timely attainment of any standard or any required interim emission reductions or ot her milestones in any ar ea.” § 7506(c) (1)(B)

. These areas are also subject to the more specific transportation conformity7

requirements , whereby f ederal agencies may not “approve, accept or fund any transportation plan, program or project
unless” it co nforms to an applicable SIP . § 7506(c)(2). With respect to transportation conformity requirements, the EPA is responsible for promulgating, and periodically updating, “criteria and procedures for demonstrating and assuring conformity in the case of transportation plans, programs, and projects .” § 7506(c)(4)(B).

5. Contingency Measures

SIPs must include contingency measures that take effect automatically “if the area fails to make reasonable further

progress , or to attain the [NAAQS] by the attainment date.” § § 7502(c)(9), 7511a(c)(9).

C. Anti

- Backsliding Measures for Revoked NAAQS

The Clean Air Act requires the EPA to “complete a thorough review” of each NAAQS every five years and “make
such revisions

. . . and promulgate such new stand ards as may be ap propriate.” § 7409(d) (1). In promulgating new standards,
if the EPA relaxes a NAAQS, it shall promulgate anti

backsliding measures for all areas that have not attained that
standard as of the date of the relaxation. § 7502(e). The anti

backsliding measures “shall provide fo r controls which are not less stringent than the controls applicable to areas designated
nonattainment before such relaxation.” Id.

D. Ozone NAAQS

In 1979, the EPA promulgated the first ozone NAAQS
based on a one

- hour average concentration of 0.12 parts per million ( ppm )

. Revisions to the NAAQS for Photochemical Oxidants, 44 Fed. Reg. 8202, 8202 (Feb. 8, 1979) . In 1997,8

after determining that the one

- hour NAAQS was inadequate to protect public health, the EPA promulgated a new NAAQS
based on an e ight

- hour average of 0.08 ppm. NAAQS for Ozone, 62 Fed. Reg. 38,856, 38,858 (July 18, 1997). Although
the EPA replaced the one

- hour NAAQS with an eight

- hour NAAQS, it determined that it would continue to enforce the

one

- hour NAAQS until “an area has atta ined air quality that
meets the 1

- hour standard.” Implementation of Revised Air Quality Standards for Ozone and Particulate Matter, 62 Fed. Reg. 38,421, 38,424 (July 18, 1997). In a 2004 rule, the EPA
revoked the one

- hour NAAQS effective June 15, 2005. Final Rule to Implement the 8

- Hour Ozone NAAQS

— Phase 1, 69 Fed. Reg. 23,951, 23,951 (Apr. 30, 2004) . This Court held that
the EPA has the “authority to revoke the one

- hour standard so long as adequate anti

- backsliding provisions are introduced.”
South Co ast Air Quality Mgmt. Dist. v. EPA , 472 F.3d 882, 899 (D.C. Cir. 2006)

, clarified on denial of reh’ g , 489 F.3d 1245 (D.C. Cir. 2007)

.

In 2008, the EPA determined that the 1997 NAAQS was inadequate to protect public health. The EPA therefore promulgated a new NAAQS of 0.075 ppm of ozone averaged over eight hours. NAAQS for Ozone, 73 Fed. Reg. 16,436

, 16,436 (Mar. 27, 2008) . “The 2008 ozone NAAQS retains the same general form and averaging time as the 0.08 ppm NAAQS set in 1997, but is s et at a more stringent level.” Implementation of the 2008 NAAQS for Ozone: State Implementation Plan Requirements, 80 Fed. Reg. 12

, 264, 12,265 (Mar. 6, 2015)

.

E. The F inal Rule

On March 6, 2015, the EPA finalized a rule that “revises existing re gulations and guidance as appropriate to aid in the implementa tion of the 2008 ozone NAAQS.” 80 Fed. Reg. at9

12,265

. As part of the Final Rule, the EPA revoked the 1997 NAAQS “for all purposes and establish[ed] anti

- backsliding requirements for areas tha t remain designated nonattainment for the revoked NAAQS.” Id.

II. STANDARD OF REVIEW

We will not set aside EPA action under the Clean Air Act
unless we determine that such action is “arbitrary, capricious,
an abuse of discretion, or otherwise not in acc ordance with law.” 42 U.S.C. § 7607(d)(9)(A). The EPA’s interpretation of
the Clean Air Act is reviewed under the familiar tw o

- step framework of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837 (1984), whereby we first
look t o the statute’s language to determine if Congress has “directly spoken to the precise question at issue.” Id. at 842. If Congress has directly spoken to the precise question, then we must “give effect t o the u nambiguously expres sed intent of Congress.” Id. at 843. If, however, “the statute is silent or ambiguous with respect to the specific issue,” we defer to the EPA’s interpretation of the Act so long as it “ is based on a permissible construction of the statute.” Id

.

Under those standards, we review in turn the cross

petitions of South Coast and the E nvironmental Petitioners

.

III. SOUTH COAST’S PETITION

We begin with the simpler of the two petitions , that of
South Coast . South Coast petitions this C ourt to invali dat e the EPA’s interpretation of the CAA in the Final Rule that “ states may not take credit for VOC or NO
x reductions occurring from sources outside the nonattainment area for purposes of mee ting the 15 percent [rate

- of

- progress] and 3 percent [reasonable
fur ther progress] requirements.” 80 Fed. Reg. at 12,273 . South10

Coast argues that the EPA was not required to interpret “in the
area” in the context of the reasonable further progress requirement to mean “ in the nonattainment area. ” See 42
U.S.C. § 7511a( b)(1)(B). In promulgating the Final Rule, the EPA explained that in light of this Court’s decision in NRDC
2009 , 571 F.3 d at 1256

, “there is no legal basis” for “allowing
states to credit reductions achieved at sources outside the
nonattainment area.” 80 Fed. Reg. at 12,273 . South Coast
counters that our decision in NRDC 2009 does not mandate the EPA’s interpretation

. Instead, South Coast contends that because downwind nonattainment areas are impacted by emissions from upwind areas, the EPA could reasonably interpret “in the area” in the context of the reasonable further progress requirement to mean the “ transport couple area ”

— “a larger area consisting of the nonattainment area in question plus the upwind area from which emission redu ctions would be
obtained

. ”

The text here is unambiguous. The Clean Air Act requires
nonattainment areas that are classified as m oderate or above to plan for “reasonable further progress” measured from “ baseline
emissions

, ” which are defined as “the total amount of actual
VOC or NO x emissions from all anthropogenic sources in the

area during the ” baseline year. 42 U.S.C. § 7511a(b)(1)(A), (b)(1)(B), (c)(2)(B) , (d), (e). The se s tatutory provisions refer to only one area

, “the area .” Further, the term appears in a

s ection entitled “Moderate Areas,” not a greater area. § 7511a(b) ; s ee also § 7511(c)(1).

South Coast contends that limiting the phrase “in the area” to nonattainment areas would produce absurd results. According to S outh Coast, it may be impossible for certain areas to achieve the necessary emissions reductions. Where the purpose of the Clean Air Act is served by interpreting “in the11

area” to mean “transport couple area,” South Coast argues that the statutory languag e is ambiguous.

However, the Clean Air Act provides for an alternative to reducing emissions of pollutants by fixed percentages. § 7511a(b)(1)(A)(ii), (c)(2)(B). Nonattainment areas may reduce emissions by less than 15 percent if they (1) implement

co ntrols on a broader range of new and existing stationary sources and (2) include in their SIP “all measures that can feasibly be implemented in the area, in light of technological achievability” and “measures that are achieved in practice by
sources in the same source category in nonattainment areas of the next higher category.” § 7511a(b)(1)(A)(ii). Likewise, nonattainment areas may reduce emissions by less than three percent if the SIP “includes all measures that can feasibly be implemented in the area, in light of technological achievability” and “measures that are achieved in practice by sources in the same source category in nonattainment areas of the next higher classification.” § 7511a(c)(2)(B)(ii). Moreover, states may also ask the EPA to approve new boundaries for air quality control regions. See 42 U.S.C. § 7407(b)

- (c). In light of the alternatives provided for in the
Clean Air Act , South Coast has failed to meet the “exceptionally high burden” required to demonstrate absurdity. Friends of Earth, Inc. v. EPA , 446 F.3d 140, 146 (D.C. Cir. 2006).

In sum, considering the grammar and context of § 7511a(b)(1)(B), we hold at Chevron step one that “in the area” unambiguously refers to baseline emissions within the nonattainment area. Accordingl y, we deny South Coast’s petition.12

IV. ENVIRONMENTAL PETITIONERS’
PETITION

Environmental Petitioners petition this Court to vacate several parts of the Final Rule. We take each challenge in turn.

A. Waiver of Statutory Attainment Deadlines
Associated w ith the 1997 NAAQS

Environmental Petitioners seek to invalidate the Final Rule’s revocation of the 1997 NAAQS. 80 Fed. Reg. at 12,296

. They argue that by revoking the 1997 NAAQS, the Final Rule arbitrarily waives the obligation to attain the 1997 NAAQS by the statutory deadline. The EPA c ounters that the Clean Air Act authorizes revocation of a superseded NAAQS so long as adequate anti

- backsliding measures are in place.

We have already held that the EPA may revoke a previous NAAQS in full “so long as adequate anti

- backsliding provisions are introduced.” South Coast , 472 F .3d at 89 9 . But
i n the Final Rule , the EPA failed to introduce adequate anti

backsliding provisions.

Pursuant to the Clean Air Act, an ti

- backsliding provisions “shall provide for controls which are not less stringent than the controls applicable to areas designated nonattainment before such relaxation.” 42 U.S.C. § 7502(e). Penalties for not meeting attainment deadlines such as fees an d activation of contingency measures are unambiguously “controls” because they are “designed to constrain ozone pollution.” South Coast

, 472 F.3d at 902

- 03. Likewise, reclassification is also a control because it is “design ed to constrain ozone pollution

. ” See id.

A reas that fail to timely attain are required to reclassify and be subject to more stringent emissions controls. 42 U .S.C. §§ 7511(b)(2), 7511a(i). If the EPA were allowed to remove13

the deadlines that trigger those penalties , “a state could go unpenalized without ever attaining” the NAAQS. South Coast

, 472 F.3d at 902

- 03.

The Final Rule provides that “the EPA is required to
determine whether an area attained the 1

- hour or 1997 ozone NAAQS by the area’s attainment date solely for anti

back sliding purposes to address an applicable requirement for nonattainment contingency measures and CAA section 185 fee programs.” 80 Fed. Reg. at 12,315

. But the Final Rule specifically waives the obligation “to reclassify an area to a higher classificatio n for the 1997 ozone NAAQS” based on a failure to meet the 1997 NAAQS attainment deadlines. Id. As a result, the Final Rule allows areas that fail to timely attain to avoid being subject to more stringent emissions controls

. Therefore, the Final Rule relaxed the controls applicable to areas designated nonattainment under the 1997 NAAQS in
contravention of t he anti

- backsliding requirement. Accordingly , we grant this part of Environmental Petitioners’ petition and vacate the Final Rule as to the w aived statutory attainment deadlines associated with the 1997 NAAQS.

B. Removal of Anti

- Backsliding Requirements for Areas Designated Nonattainment Under the 1997 NAAQS

E nvironmental Petitioners also seek to invalidate other provisions of the Final Rule that they allege contravene the
Clean Air Act’s anti

- backsliding requir ements. The Final Rule provides for three procedures by which areas designated nonattainment under the 1997 NAAQS may remove certain
anti

- backsliding requirements an d shift other requirements from the active portion of their SIPs to the contingency

measur es portion. 80 Fed. Reg. at 12,299

- 12,304

.14

1. Orphan Nonattainment Areas

T he first procedure applies to areas designated a ttainment for the 2008 NAAQS, but nonattai nment for the 1997 NAAQS

. Id. at 12,301

- 12,302 . Environmental Petitioners refer to these

areas as “orphan nonattainment areas.” For orphan nonattainment areas, “states are not required to adopt any outstanding applicable requirements for the revoked 1997
standard.” Id. at 12,302

. Under the Final Rule, orphan nonattainment areas “are not subject to transportation or general conformity requirements.” Id. at 12,300

. In addition

, orphan nonattainment areas are no longer r equir ed to retain
New Source Review programs in their SIPs

. Id. at 12,299

. Instead, these areas are subject to Prevention of Significant
Deterioration (“PSD”) requirements. Id. States may also

r equest that other anti

- backsliding requirements be shifted to their list of contingency measures based on initial 2008 designati ons. Id. at 12,314

. Finally, the Final Rule does not require orphan nonattainment areas to submit maintenance plan s under § 7505a , and deems the requirement for
maintenance under § 7410(a)(1) to be satisfied by the area’s approved P revention of S ignificant Deterioration SIP

. Id. at 12,302 , 12,314

.

( a ) Environmental Petitioners argue that elimination of
New Source Review and conformity in orphan nonattainment
areas violates the anti

- backsliding requirements. The EPA argues that the Final Rule lawfully lifts the requirement for
New Source Review and conformity for orphan nonattainment areas because the 2008 NAAQS is more stringent than the 1997 NAAQS. According to the EPA, areas that have attained the 2008 NAAQS have necessarily attained the 1997 NAAQS.

This Court previously held that New Source Review is unambiguously a “ control ” under § 7502(e). South Coast , 47215

F.3d at 901

- 02

. Environmental Petitioners also contend that

co nformity is a “control” under § 7502(e). The EPA does not address general conformity requirements, but argues that our decision in South Coast does not require transportation conformity as an anti

- backsliding control . According to the EPA, in South Coast we held that only existing motor vehicle emissions budgets are required anti

- backsliding controls, not
the conformity requirement itself.

The Final Rule provides that 1997 nonattainment areas are “no longer

. . . required to demonstrate transportation conformity for the 1997” NAAQS after the 1997 NAAQS is
revoked. 80 Fed. Reg. at 12,284. Pursuant to the Final Rule, “the latest approved or adequate emission budgets for a previous ozone NAAQS

. . . would con tinue to b e used in conformity determinations for the 2008 ozone NAAQS until

em ission budgets are established and found adequate or are approved for the 2008 ozone NAAQS .” I d. But t he Final Rule provides that area s “designated attainment for the 2008 ozo ne NAAQS are not subject to transportation or general conformity requirements regardless of their designation for the 1997 ozone NAAQS at the tim e of revocation of that NAAQS

. ” I d. at 12,300

.

The EPA is correct that South Coast held only that “one

hour conformity emissions budgets constitute ‘controls’ under section 172(e).” 472 F.3d at 904. Furthermore, on rehearing,

we clarified that our decision with respect to conformity determinations “speaks only to the use of one

- hour mo tor vehicle emissions budgets as part of eight

- hour conformity determinations until eight

- hour motor vehicle emissions budgets are available.” South Coast Air Quality Mgmt. Dist. v

. EPA , 489 F.3d 1245, 1248 (D.C. Cir. 2007). But our decision
that emissio ns budgets constitute controls does not preclude
that “ conformity ” requirements in general are controls

.16

Conformity requirements are designed to constrain ozone pollution as they have the “purpose of eliminating or reducing the severity and number of violations of the [NAAQS] and achieving expeditious attainment of such standards.” 42 U.S.C. § 7506(c)(1) (A). Therefore, conformity requirements
als o are u nambiguously “controls” under § 7502(e).

Altho ugh orphan nonattainment areas we re originally designated attainment under the 2008 NAAQS, they have never been redesignated to attainment pursuant to § 7407(d)(3)(E) under the 1997 NAAQS. The EPA ma y not permit termination of New Source Review and conformity in the absence of formal redesignation under § 7407(d)(3) (E)

. See Natural Res. Def. Council v. EPA , 643 F.3d 311, 32 2

- 2 3 (D.C. Cir. 2011) (rejecting final rule that allowed attainment of the 1997 NAAQS to permit termination of the fees cont rol for

t he one

- hour NAAQS ) . As we stated in our prior South Coast opinion, “ EPA is required by statute to keep in place measures
inten ded to constrain ozone levels

— even the ones that apply to
outdated standards

— in order to prevent backsliding.” South

Coast , 472 F.3d at 905. Accordingly, we grant Environmental Petitioners’ petition and vacate the Final Rule as to the removal
of New Sour ce Review and conformity controls from orphan
nonattainment areas

.

(b ) Environmental Petitioners argue that permitting states
to shift other anti

- backsliding requirements to contingency
measures violates the Clean Air Act. The EPA responds that states must continue implementing all such measures in previously approved SIPs unless the EPA approves requests to
amend SIPs to convert such requirements into contingency

measures. For the same reasons that the EPA may not permit
states to eliminate New Source Review and transportation conformity, the EPA also may not permit states to shift other
anti

- backsliding requirements to their list of contingency17

measures without comply ing with the statutory r equirements for redesignation. Therefore

, we grant En vironmental Petitioners’ petition and vacate the Final Rule as to permitting

states to move ant i

- backsliding requirements for orphan
nonattainment areas to their list of contingency measures based on initial 2008 designations.

(c ) Likewise, without requi ring nonattainment areas to meet the requirements for reattainment under § 7407(d)( 3)(E),
the EPA improperly waived the requirement that states adopt outstanding applicable requirements for the revoked 1997 NAAQS. Therefore, we grant Environmental Petitioners’ petition and vacate the Final Rule as to waiving the requirement that states adopt outstanding applicable requirements for the revoked 1997 NAAQS.

(d ) Environmental Petitioners argue that the Final Rule imp ermissib ly waives the maintenance requirements under § 7410(a)(1) for orphan nonattainment areas. The Final Rule
allows approved Prevention of Significant Deterioration SIPs

to satisfy the obligation to submit a maintenance plan under § 7410(a)(1). 80 Fe d. Reg. at 12,302. P revention of
S ignificant Deterioration SIPs bar the construction of major

sources of emissions without compliance with certain statutory requirements. See § 7475(a).

The Final Rule also does not require orphan nonattainment areas to submit a maintenance plan under § 7505a. 80 Fed. Reg. at 12,302. The EPA contends that there is no statutory requirement for a separate maintenance plan f or orphan
nonattainment areas. H owever, o ne of the five requirements for redesignation under § 7407(d)(3)(E) is that the EPA “approve[] a maintenance plan for the area as meeting the requirements of section 7505a of this title.” § 7407(d)(3)(E)(iv). Therefore, t he Final Rule is inconsi stent18

with the clear text of § 7407(d)(3)(E) in waiving the § 7505a(a) maintenance plan requirement for orphan nonattainment areas.

Environmental Petitioners also appear to contend that even with a § 7505a maintenance plan , the Final Rule would violate the maintenance requirement under § 7410(a)(1) because § 7410(a)(1) requires something more than a Prevention of
S ignificant Deterioration SIP and a § 7505a maintenance plan

. Specifically, Environmental Petitioners argue that a SIP for an orphan nonattain ment area must include a plan to ensure that pollution from existing sources and new sources not subject to the PSD requirements do es not cause those areas to fall into violation of the 2008 NAAQS. According to Environmental Petitioners, without such safe guards

, existing measures have proved insufficient to provide for continuing attainment of the 2008 NAAQS.

Section 7410(a)(1) provides that SIPs must provide for “implementation, maintenance, and enforcement” of the NAAQS. The statute clearly requires “maintenance” provisions to be included in SIPs, but the statute does not require a separate SIP component entitled “maintenance plan.” In fact, the statute provides no guidance for what SIPs must include in order to comply with the § 7410(a)(1) maintenan ce requirement beyond the criteria laid out in § 7410(a)(2). Environmental Petitioners do not allege the agency has
eliminated § 7410(a)(2)’s requirements . Therefore, the Final Rule will be upheld so long as it is neither unreasonable nor
arbitrar y.

T he EPA justified the rule by explaining that a § 7471 “PSD SIP, in conjunction with the other already

- existing statutory and regulatory provis ions

. . . are generally sufficient to prevent backsliding, and to satisfy the requirement for
maintenance under” § 7410(a)(1). 80 Fed. Reg. at 12

, 302

.19

According to the EPA, the “control measures implemented by these areas and included in their SIPs have already produced
sufficient emissions reductions to achieve air quality that
attained the 1997 ozone NAAQS, and resulted in a n attainment designation for the more stringent 2008 ozone NAAQS.” Id.
The EPA therefore concluded that “the burden of develo ping

an approvable [§ 7410(a)(1)] maintenance plan for the 2008 ozone NAAQS would outweig h any compensating benefit for an area that is already attaining that NAAQS and that is subject to prior nonattainment requirements which are already incorporated into the SIP and have been sufficient to bring the
area into attainment of both the 1997 and 2008 standards.” Id.

The EPA adequately explained why measures that
achieved attainment of both the 1997 NAAQS and the 2008 NAAQS should be adequate to maintain the same 2008 NAAQS that has already been attained. The EPA also thoughtfully responded to comments that suggested the
measures on which the EPA relies ar e insufficient to satisfy the § 7410(a)(1) maintenance requirement . Under these circumstances, the EPA’s determination is neither unreasonable nor arbitrary.

Environmental Petitioners con tend that the EPA has not
addressed comments that identified examples of orphan nonattainment areas that purportedly were in fact not attaining the 2008 NAAQS. These comments wer e not raised in regard to the § 7410(a)(1) maintenance requirement. Instead, they appear to have been raised in response to other alleged shortcomings with the p roposed rule. Moreover, t he EPA

appears to have a ddressed those argument s in its response to

comments. Response to Comments on Implementation of the 2008 NAAQS for Ozone : SIP Requirements (Feb. 13, 2015) at
133

. In any event, the comments are directed to ward enforcement issues with the current NAAQS, not issues with20

the underlying rule. Accordingly, the EPA’s decision not to implement a separate § 7410(a) maintenance pl an is neither arbitrary nor unreasonable.

Therefore, we grant Environmental Petitioners’ petition
and vacate the Final Rule with respect to th e EPA’s waivin g of the § 7505a(a) maintenance plan requirement for orphan
nonattainment areas, and we deny Environmental Petitioners’ petition with respect to the § 7410(a)(1) maintenance requirement ’s application to orphan nonattainment are as in other respects.

2. Formal Redesignation

The second procedure by which areas designated
nonattainment under the 19 97 NAAQS may remove certain
anti

- backsliding requirements and shift other requirements from the active p art of their SIPs to the contingency measures

p art involves areas designated nonattainment under both the 2008 NAAQS and the 1997 NAAQS. 80 Fed. Reg. a t 12,303

- 04 . The Final R ule allows states to seek formal redesignation to attainment based on the 2008 NAAQS with an approved maintenance plan that addresses the current and revoked NAAQS. Id. at 12,304

. Under this procedure, states may
terminate and re move any applicable anti

- backsliding requirements, including N ew S ource R eview requirements

, from the active p art of their SIP s

. Id.

The EPA properly subjected these areas to anti

backsliding requirements when the 1997 NAAQS was revoked because they were still in nonattainment at the time of
revocation. See § 7502(e). The Act is ambiguous as to whether
such areas must retain these ant i

- backsliding requirements after they are successfully redesignated as attainment areas under the 2008 NAAQS

. Unlike orphan nonattainment areas, these areas21

have met the statutory requirements for rede signation under § 7407(d)(3)(E). Therefore, t hese are as have shown, for example, that “the[ir] improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable implementation plan.” § 7407(d)(3)(E )(iii). Although these areas may not have been redesignated with respect to the 1997 NAAQS, by meeting the statutory requirements for redesignation with respect to the 2008 NAAQS, they necessarily also meet the less restrictive requirements for redesignation under the 1997 NAAQS.
Ac cordingly, it is reasonable for these areas to shed their anti

backsliding controls by virtue of meetin g the five statutory
criteria for redesignation. Therefore, we deny Environmental
Petitioners’ petition with respect to this aspect of the Final
Rule.

3. Redesignation Substitute

The third procedure by which areas designated nonattainment under the 1997 NAAQS may remove certain
anti

- backsliding requirements and shift other requ irements from the active part of their SIPs to the contingency measures
part also involves areas designated nonattainment under both
the 2008 NAAQS and the 1997 NAAQS. This procedure allows states “to submit a redesignation substitute request for a revoked NAAQS.” 80 Fed. Reg. at 12,304

. The r edesignation substitute request “is based on” the Clean Air Act’s “criteria
for redes ignation to attainment” under § 7407(d)(3)(E), 80 Fed. Reg. at 12,305, but it does not require full complianc e with all five conditions in § 7407(d)(3)(E)

. The Clean Air Act unambigu ously requires n onattainment areas to s atisfy all five
of the conditions under § 7407(d)(3)(E) before they may shed controls associated with their nonattainment designation. The redesignation substitute lacks the following requirements of § 7407(d)(3)(E): (1) the EPA has “fully approved” the22

§ 7410(k) implementation plan; (2) the area’s maintenance plan satisfies all the requirements under § 7505a; and (3) the state has met all relevant § 7410 requirements. 80 Fed. Reg. at 12,305. Because the “redesigna tion substitute” does not
include all five statutory requirements , it violates the Clean Air

Act. Therefore, we grant Environmental Petitioners’ petition
and vacate the Final Rule as to the “redesignation substitute.”

C. Baseline Year

The Clean Air Act measures Reasonable Further Progress by using a baseline year as the starting point. Nonattainment

areas must reduce emissions of pollutants by fixed percentages compared to the pollutant level in a baseline year. 42 U.S.C. § 7511a(b)(1)(A) , (B)

. The i nitial baseline year under the

statute is 1990

, id.

, but the statute does not define baseline year s for future NAAQS. In the Final Rule, the EPA defined the baseline year as 2011, which is the “calendar year for the most recently available triennial emission inventory at the time [rate

of

- progress/reasonable further progress] plans are developed.” 80 Fed. Reg. at 12,272 . The Final Rule also allows states to select an alternative baseline year between 2008 and 2012 if they provide appropriate justifi cation. Id.

Environmental Petitioners argue that this rule is unlawful
because the Clean Air Act requires the baseline year to be the year of designation/classification , which in the case of the 2008 NAAQS is 2012. W hile an initial baseline year of 199 0 is specified by statute, the Clean Air Act is silent regarding future baseline years. Therefore, this question is governed by
Chevron step two. The Reasonable Further Progress requirement ensures that states make regular emission s reductions to achieve timely attainment. See § 7511a

. To monitor their progress in achieving regular emission s reductions, states are required to prepare an emission s23

inventory every three years. § 7511a(a)(3)(A). The EPA’s
selection of 2011 as the ba seline year is reasonable because it
is tied to the three

- year statutory c ycle for emissions
inventories

. Id. Therefore, we deny Environmental Petitioners’ challenge to the setting of 2011 as the baseline

year.

With respect to selection of an alterna tive baseline year between 2008 and 2012, the EPA has failed to provide a statutory justification. The “EPA must ‘ground its reasons for action or inaction in the statute,’ rather than on ‘reasoning divorced from the statutory text.’” Natural Res. Def. Council

v. EPA ( NRDC 2014 ) , 777 F.3d 456, 468 (D.C. Cir. 2014) (quoting Utility Air Regulatory Grp. v. EPA , 134 S. Ct. 2427, 2441 (2014)). The EPA based its creation of the alternative
baseline year option on the convenience of allowing
nonattainment are as to receive credit for emission s reduction measures adopted prior to the baseline year. Because the EPA
has no statutory basis for the alternative baseline year provision , we grant Environmental Petitioners’ petition and
vacate the Final Rule as to the alternative baseline year option.

D. Fifteen

- Percent Rule

The Clean Air Act requires an area in a moderate or greater degree of nonattainment t o reduce emissions of VOCs by
fifteen percent within six years of the baseline year . 42 U.S.C. § 7511a( b)(1)(A). The Final Rule interprets this requirement as meaning that “an area that has already met the 15 percent requirement for VOC under either the 1

- hour ozone NAAQS or the 1997 ozone NAAQS (for the first 6 years after the [reasonable further progress ] baseline year for the prior ozone NAAQS) would not have to fulfill that requirement again.” 80 Fed. Reg. at 12,271 ; see also id. at 12,276 . The Environmental Petitioners argue that the rule is unlawful because the24

interpretation allows areas to avoid a ctually achieving
emissio ns reductions to satisfy the fifteen

- percent requirement.

The Final Rule does not require nonattainment areas that have previously revised their SIPs to address the Clean Air
Act’s fifteen

- percent requirement to revise their S IPs again. If
an area fails to achieve this r eduction according to their pla n, a petitioner may file for injunctive relief or the EPA may pursue
an enforcement action. Environmental Petitioners argue that
the Final Rule allows nonattainment areas to omit the fifteen

percent requirement even if the y never previously achieved a
fifteen

- percent reduction. The EPA has represented that the provision at issue in this case is the same as that at issue in
NRDC 2009

, 571 F.3d 1245. In NRDC 2009 , the EPA rule
all owed areas th at had revised their SIPs to include a fifteen

percent VOC emission s reduction to not be subjected to a
second fifteen

- percent requirement under the new NAAQS. Id.
at 1261. We held that “the EPA reasonably resolved a statutory ambiguity unde r step 2 of the framework set out in Chevron .”
Id. at 1262. W e accept the EPA’s representation that the
fifteen

- percent requirement in the Final Rule is the same as the provision at issue in NRDC 2009 . Therefore, because the EPA’s interpretation is permissible, we deny Environmental
Petitioners’ challenge to the fifteen

- percent reduction plan
waiver.

E. Area

- Wide Emission s Reductions

The Clean Air Act requires nonattainment areas to achieve
“such red uctions in emissions from existing sources in the area” as can be achieved by the adoption of Reasonably Available Control Technology (“RACT”) . 42 U.S.C. § 7502(c)(1). The Final Rule allows nonattainment areas to satisfy the NO x RACT requirement by using averaged area

wide emission s reductions. 80 Fed. Reg. at 12,278

- 79

. Thus,25

“states may demonstrate as part of their NO
x RACT SIP submittal that the weighted average NO
x emission rate from all sources in the nonattainment area subject to RACT meets NO
x RA CT requirements.” Id. at 12,278

. Environmental Petitioners argue that this rule violates the clear terms of t he Clean Air Act, which require each individual source to meet
the NO
x RACT requirement

.

They contend that § 7511a(b)(2) requires implementation
of RACT with respect to “all” major sources, and “all” means
“each one of.” Section 7511a(b)(2) requires states to submit revisions to SIPs “to include provisions to require the implementation of reasonably available control technology
unde r section 7502(c)(1) of this title with respect to each of ”
three speci fic categories o f VOC sources, including “all . . . major stationary sources of VOCs that are located in the area.” Pursuant to § 7511a(f), that plan provision applies to “major
statio nary sources” of NO
x . Section 7511a(b ) (2) refers to “all” “major stationary sources” and requires implementation of
RACT “with respect to” that entire cat egory of sources. The statute does not specify that “each one of” the individual sources within the category of “all” “major sources” must implement RACT

. Environmental Petitioners argu e that the only reasonable dictionary definition of “all” when used with a plural noun (major stationary sources) is “each one of.”

Ins tead, w hen used to refer to a plural noun, the word “all” may express an aggregate and be defined as the “ whole number or
sum of. ” Black’s Law Dictionary 74 ( 6th ed. 1990). This
definition is consistent with the categorical approach taken by
the EPA. In short , the plain language

— in the context of the interrelationship between §§ 7511a(b)(2) and 7502(c)(1)

— does not mandate RACT for each individual source.

Therefore, as discussed above, we cannot strike down the EPA’s reasoned interpretation of the ambiguous term at26

Chevron step one, see Section II, supra

. We must instead uphold the EPA’s interpretation, provided it is reasonable,
under Chevron step two. S ee Chevron , 467 U.S. at 842

- 43.

We further note that § 7511a(b)(2) refers to § 7502(c)(1), which provides that SIP “provisions shall provide for the implementation of all reasonably available control measures as expeditiously as practicable (including suc h reductions in emissions from existing sources in the area as may be obtained through the adoption, at a minimum, of reasonably available control technology ) .” § 7502(c)(1). Section 7502(c)(1) does not require reductions from each individual major sourc e. Instead, it requires “reductions in emission s from existing
sources in the area ,” and other than mandating that implementation be as “expeditious[] as practicable ,” the
section is ambiguous as to how areas are required to achieve
those reductions.

T he EPA’s interpretation reasonably allows nonattainment
areas to meet RACT

- level emission s requirements through averaging withi n a nonattainment area. Therefore, we deny
Environmental Petitioners’ petition as to the EPA’s construction of the RACT requirement.

F. Waiving Requirements for Areas Designated Maintenance Under the 1997 NAAQS

Environmental Petitioners seek to have us invalidate
several provisions of the Final Rule that apply to areas designated attainment for the 2008 NAAQS after being designated maintenance areas under the 1997 NAAQS (“orphan maintenance areas” ).27

1. Elimination of Transportation Conformity

As with orphan nonattainment areas, the Final Rule declares that orphan mai ntenance areas are “no longer

. . . required to demonstrate transportation conformity for the 1997 ozone NAAQS after the 1997 ozone NAAQS is revoked.” 80 Fed. Reg. at 12,284. Environmental Petitioners argue that the elimination of transportation conformity in orphan
maintenance areas violates the Clean Air Act. Section 7506(c)(5) provides that conformity requirements apply to “(A) a nonattainment area and each pollutant for which the area is designated as a nonattainment area; and (B) an area th at was designated as a nonattainment area but that was later redesignated

. . . as an attainment area and that is required to develop a maintenance plan under section 7505a.”

We previously explained that the EPA lack s the authority to revoke transport at ion conformity for orphan nonattainment

areas. See Section IV.B.1(a), supra

. The EPA argues that it is permitted to remove conformity requirements for orphan
maintenance areas because such areas became attainment areas for the 1997 NAAQS prior to the da te on which it was revoked. As a result, the EPA argues that these areas are not subject to
anti

- backsliding requirements, so there is no statutory requirement that they maintain the transportation conformity requirement. We disagree.

In contrast to n onattainment areas, which § 7506(c)(5) references by their status as “nonattainment area[s],” maintenance areas are referenced by previous events: “an area
that was designated as a nonattainment area but that was later redesignated

. . . as an attainment area and that is required to develop a maintenance plan under section 7505a.” § 7506(c)(5) (emphases added). Although the Final Rule28

revoked the 1997 NAAQS, it cannot revoke the statutory status of orphan maintenance areas. Even after revocation of the 1997 NAAQS, an orphan maintenance area is “an area that was designated as a nonattainment area but that was later redesignated

. . . as an attainment area.”

It is irrelevant that this previous designation and redesignation occurred before the prior NAAQ S was revoked because nothing in the Clean Air Act allows the EPA to waive this unambiguous statutory requirement. Moreover, the Act clearly contemplates new NAAQS being promulgated within

ten years of an area’s redesignation to attainment because the

sta tute requires the EPA to review NAAQS every five years and to “promulgate such new standards as may be appropriate.” § 7409(d)(1). Therefore, the revocation of the 1997 NAAQS does not waive the unambiguous mandate that conformity requirements apply to or phan maintenance areas. Accordingly,

we grant Environmental Petitioners’ petition as to the elimination of transportation conformity in orphan
maintenance areas.

2. Section 7410(a)(1) Maintenance Planning Requirement

Environmental Petitioners contend tha t the Final Rule unlawfully waives the § 7410(a)(1) maintenance planning requirement for the 2008 NAAQS. 80 Fed. Reg. at 12,301. The Final Rule provides that an orphan maintenance area’s § 7505a(a) maintenance plan for the revoked 1997 NAAQS
and the state’s approved P revention of Significant
Deterioration SIP satisfy the area’s obligations for maintenance of the 2008 NAAQS under § 7410(a)(1) of the Clean Air Act. 80 Fed. Reg. at 12,301, 12

, 314

. Environmental Petitioners

argue the Prevention of Signi ficant Deterioration SIP is the sole maintenance plan requirement for the 2008 NAAQS, and it29

only addresses poll ution from very large sources. According to Environmental Petitioners, the EPA has no statutory authority to waive the § 7410(a)(1) maintenance requirement.

The EPA justified its rule on the ground that orphan maintenance areas have already been redesignated to attainment for the 1997 NAAQS and designated attainment for the more stringent 2008 NAAQS. 80 Fed. Reg. at 12,301. According to the EPA, “[a]ny further [§ 7410(a)(1)] maintenance plan requirement under the 2008

. . . NAAQS would be unnecessarily burdensome.” Id. Although the § 7505a(a) maintenance plans for orphan maintenance areas
“were establishe d for maintenance of the 1997

. . . NAAQS,

. . . they also provide a foundation for maintenance
of the 2008

. . . NAAQS , which, in combination with other active requirements for the 2008 ozone NAAQS, contribute to
maintenance of the new standard.” Id. Th e Final Rule explained that “no addition al measures beyond the prior [§ 7505a(a)] maintenance plans and the PSD plans for the 2008 [NAAQS] should be necessary to provide for maintenance in
those areas.” Id.

We previously addressed the alleged waiver of the § 7410(a)( 1) maintenance requirement with respect to orphan
nonattainment areas. See Section IV.B.1(d), supra

. As we explained, § 7410(a)(1) does not provide clear requirements as

to what SIPs must incl u d e in order to comply with the § 7410(a)(1) maintenance requirement beyond the criteria laid out in § 7410(a)(2)

. As with orphan nonattainment areas, with

respec t to orphan maintenance areas, t he EPA adequately explained why no additional measures beyond the § 7505a(a) maintenance plans and the Prevention of Significant
Deterioration plans for the 2008 NAAQS are necessary to provide for maintenance of the 2008 NAAQS. Therefore, we deny Environmental Petitioners’ petition with respect to the30

§ 7410(a)(1) maintenance requirement’s application to “orphan maintenance areas. ”

3. Elimination of Second Maintenance Plan

Environmental Petitioners challenge the Final Rule’s
elimination of the requirement that orphan maintenance are as

prepare a second maintenance plan under § 7505a(b). 80 Fed. Reg. at 12,301. Section 7505a(b) provides that “8 years after redesignation of any area as an attainmen t area,” states “shall
submit

. . . an additional revision of the” maintenance plan “for 10 years after the expiration of the 10

- year period referred to in subsection (a).” The EPA argues that the requirement for a
second 10

- year maintenance plan is based on an area’s designation status under an operative NAAQS. When the 1997 NAAQS was revo ked, the orphan maintenance areas ’ designations as maintenanc e under the 1997 NAAQS were
revoked as well.

The statutory requirement for a s econd main tenance plan is unambiguous. § 7505a( b). And the Clean Air Act clearly contemplates new NAAQS being promulgated within eight years of an area’s redesignati on to attainment because the statute requires the EPA to review NAAQS every five years and to “promulgate such new stand ards as may be ap propriate.” § 7409(d)(1). Therefore, the revocation of the old NAAQS does not waive the unambiguous requirement for second
maintenance plans under § 7505a(b). Accordingly, we grant Environmental Petitioners’ petition and vacate the Final Rule provision waiving the second 10

- year maintenance plan for “orphan maintenance areas.”31

V. Conclusion

For the reasons set forth above, we deny So uth Coast’s petition for review and grant in part and deny in part the Environmental Petitioners’ petition

. Specifically , we grant Environmental Petitioners’ petition and vacate as to (1) waiver of the statutory attainment deadlines a ssociated with the 1997 NAAQS; (2) removal of New Source Review and conformity controls from orphan nonattainment areas ; (3) grant of permission to states to move ant i

- backsliding requirements for orphan nonattainment areas to their list of contingency measures based on initial 2008 designations; (4) waiver of the requirement that states adopt outstanding applicable requirements for the revoked 1997 NAAQS; (5) waiver of the § 7505a(a) ma intenance plan requirement for orphan
nonattainment areas ; (6) creation of the “redesignation substitute”; (7) creation of an a lternative baseline year option; (8) elimination of transportation conformity in orphan
maintenance areas; and ( 9 ) waiver of the requirement for a

secon d 10

- year maintenance plan for orphan maintenance

areas. In all other respects, Environmental Petitioners’ petition
is denied.

So or dered.